Summary
- Saputo’s big efficiency push is paying off, with smarter operations and automation driving better performance across all its markets.
- Profits, margins and cash flow all climbed through FY26, showing those efficiency gains are now really landing.
- Strong demand for high‑protein dairy and value‑added products is setting Saputo up for more growth ahead.
Saputo’s long-term efficiency drive is bringing consistent growth for the global dairy processor.
Across the three quarters of the fiscal year, the Canadian multinational’s net earnings, earnings per share and EBITDA margin all expanded – suggesting that efficiency gains are now delivering steady profitability.
This momentum has made Saputo stock attractive to investors. The company’s shares have shot up almost 4% in the past year, with brokers Jefferies, JP Morgan and Berenberg all retaining a ‘buy’ rating for the dairy processor in recent weeks.
So what’s fueling this confidence? Here’s what Saputo is doing right.
How Saputo’s overhaul strengthened its core
In 2022, Saputo set out a capital investment and consolidation plan that would help it improve operational efficiencies, cut costs, and invest in high-value products.
The company has since consolidated plants and warehouses in the US and Canada to reduce duplication; invested in automation to improve manufacturing efficiencies; simplified cost structures, and realized growth in categories such as branded cheese and high-protein dairy.
In the US, the new milk pricing formula, effective since June 2025, contributed positively, but Saputo also experienced higher volumes and a favorable mix in retail and foodservice in addition to streamlined operating costs thanks to the plant consolidation.
In Canada, high-protein dairy delivered for the processor commercially, in addition to investment in automation in manufacturing.
In Europe, branded cheese sales and pricing drove revenue.
And in other international markets, Saputo also excelled despite a volatile commodity and trade environment. In Argentina, the company benefited from lower milk costs and stable FX, while its strategic portfolio shift helped offset the impact of drought and higher milk costs in Australia.
Improved margins and cash flow
Saputo’s efficiency and investment drive is delivering strong financial returns already this fiscal year (FY26).
Cash generation across Q1 to Q3 improved consistently:
- Q1: $317m (up 66%)
- Q2: $372m for quarter; $689m for H1 (up 95%)
- Q3: $401m for quarter; $1.09bn for nine months (up 48%)
EBITDA margin also rose each quarter year over year:
- Q1: 9.2% (vs 8.3%)
- Q2: 9.5% (vs 8.3%)
- Q3: 10.1% (vs 8.4%)
And net earnings – including adjusted – rose meaningfully throughout the fiscal year.
- Q1: $165m, up from $142m (up 16%)
- Q2: $185m, up from $126m (up 47%)
- Q3: $220m, up from a $518m loss in Q3 FY25 / Q3 adjusted: $235m vs $167m (up 41%).
All costs are expressed in CAD for consistency (1 USD = 1.3561 CAD in current currency terms).
Long‑term growth supported by protein demand
Back in 2022 when the company first set out its investment and consolidation plan, the promise was to deliver $112m in annual savings by the end of FY25 plus sustainable margin improvements.
Though Saputo has not provided like-for-like comparisons with this target, it’s clear that the company is reaping major operational and financial benefits from the program.
Analysts predict the company is positioned for continued improvement going forward – and protein is a big part of the positive narrative.
Saputo’s management sees growth in high-protein as a major driver across North America and internationally.
Value-added ingredients in foodservice are also seen as crucial, with Saputo pointing out its shift toward a higher-margin product mix has already contributed positively to profitability.
Branded cheese – particularly in Canada and Europe – along with cultured products are also expected to remain important volume growth drivers.
All of this is strategically supported through Saputo’s consolidation activity in plants and warehousing in North America, which should enable the company to efficiently produce value-added dairy ingredients to support its growth ambitions going forward.
